( 2025:HHC:29911 ) IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA LPA No. 30 of 2018 Decided on: 26th August, 2025 _________________________________________________ Ashwani Bali (since deceased) through LRs ....Appellants Versus Parwati Devi and others …Respondents ___________________________________________________ Coram Hon’ble Mr. Justice G.S. Sandhawalia, Chief Justice Hon'ble Mr. Justice Ranjan Sharma, Judge Whether approved for reporting? 1 For the Appellant: Mr. Sumit Sood, Advocate. For the respondents: Mr. G.D. Verma, Senior Advocate with Mr. Sumit Sharma, Advocate, for respondents No.1 and 2. Respondents No.3 and 4 stand deleted. Mr. Arvind Sharma, Advocate, for respondent No.5. G.S. Sandhawalia, Chief Justice (Oral) The challenge in the present Letters Patent Appeal by the auction purchaser is to the order of the learned Single Judge passed in CWP No.324 of 2011 titled Ms. Parwati Devi and another Vs. State Bank of Patiala and others, wherein the 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 learned Single Judge set aside the order dated 30.11.2010 (Annexure P-6), passed by the Debts Recovery Appellate Tribunal, New Delhi by setting aside the auction proceedings with respect to the mortgage property of the Writ petitioners as such and held that there was nothing payable by them as they have already deposited the amount in compliance of the order passed by the Tribunal on 14.07.2008. Directions were also issued to handover the possession of the land alongwith structure to the petitioners within a period of four weeks and in case any addition/alteration or improvement was done by the auction purchaser, he shall be entitled to recover the same from the Bank. 2. The said order stands stayed vide order dated 01.10.2018, whereby status quo had been directed to be maintained by the Coordinate Bench. 3. The reasons which weighed with the learned Single Judge as such to set aside the order of Appellate Tribunal was the manner in which the property had been put to sale which not only comprised of land, but also built up structure in the form of four storeyed building, which was claimed to have a valuation of Rs.16,00,000/-. 3 4. The learned Single Judge noticed that even the Bank has not disputed the existence of the structure and there was no valuation report produced before the Tribunal, but it had only been produced before the Appellate Tribunal. 5. Reference was also made to the notice under Section 13(2) of the Securitization and Reconstructsssion of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’) dated 12.12.2005, wherein the details of the structure raised are not mentioned and only description of the land measuring 0-01-70 hectares (0.4 Biswa) was mentioned. The sale certificate, which was also referred to, only makes a mention of the land and not of the built up structure. 6. The proceedings of the auction, which have been place on record, were also referred to, to come to the conclusion that the bid was only for the land and not for the built-up structure and therefore the sale conducted in pursuance of a proclamation was containing vague, inaccurate and misleading description of the property or incomplete description of the property which has seriously prejudiced the judgment debtor. It was accordingly held that if the details regarding the land alongwith four lintels standing thereupon had been clearly mentioned, it would have fetched a 4 much higher price than the one offered by respondent No.3/appellant herein. 7. The learned Single Judge also came to the conclusion that the Bank in an unreasonable and arbitrary manner put only the land to sale without disclosing that there was structure standing thereupon for a low price of Rs.8,80,000/-, whereas, as per the valuation report, the property was more than Rs.15,00,000/-. 8. Reference was made to various judgments that confirmation can only be done if there is no collusion and value of the property has to be kept in mind vis-à-vis the reserved price. 9. While placing reliance upon Ram Kishun and others Vs. State of Uttar Pradesh and others (2012) 11 SCC 511, on the issue of the recovery of public dues, it was held that the sale can be set aside if the property does not fetch the proper price. 10. Resultantly, the findings recorded by Debt Recovery Appellate Tribunal were held to be not justified and the order passed by the Tribunal on 17.12.2009 in effect was upheld. 11. Learned counsel for the appellant has argued that the Bank has not only taken the amount of Rs.8,80,000/- and utilized the same and the auction purchaser has been put to hardship 5 and on account of illegalities of the Bank, the auction purchaser should not suffer. 12. The counsel for the loanees/writ petitioners submitted that the Tribunal had disposed of the petitions on two occasions; firstly, on 31.07.2009, when the matter was remanded and thereafter on 17.12.2009 by a speaking order. The Tribunal had set aside the sale deed dated 01.08.2006 and directed that the restoration should be done to the loanees on account of the fact that the entire outstanding dues of Rs.5,07,076/- have been paid to the Bank, by which the dues of the bank stood satisfied. 13. It was further brought to our notice that the challenge before the DRT was never by the Bank and was only by the auction purchaser and in such circumstances, it is submitted that the order passed by the learned Single Judge is justified in the peculiar facts and circumstances since the Bank had acted in grave haste inspite of an order dated 22.08.2006, whereby the Tribunal had stayed the proceedings, but the sale had been confirmed on 01.09.2006 and the sale certificate had been issued on 02.09.2006. 14. A perusal of the record would go on to show that on filing of the SA No.239 of 2006 by the loanees, the auction under 6 Section 13(4) of the SARFAESI Act had been challenged, since notice was issued on 24.03.2006. The petition had been preferred on the ground that keeping in view the fact that the loanee had already deposited a sum of Rs.2,85,000/- against the outstanding amount of Rs.5,00,000/- of the loan sanctioned and disbursed way-back on 21.11.2002 and they had got knowledge on 02.08.2006 that the property had been sold. The Tribunal had passed the order, whereby the confirmation of sale and issuance of sale certificate and taking over of actual possession of residential house has been stayed. The order passed on 22.08.2006 reads as under:- “SA-239/06 Geeta Devi vs. SBOP 22.08.2006 Present: Shri Atul Mahajan, advocate for appellant/applicants. This is an application under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, Act, 2002 (hereunder referred to SARFAESI Act, 2002). The applicant/appellant have challenged the action of the respondent bank by virtue of powers conferred under Section 13(4) of the SARFAESI Act, 2002. It is stated by learned counsel for the appellant/applicant that the appellants were never served under Section 13(2) & 13(4) of SARFAESI Act, 2002. First time, the applicants came to know on 2.8.06 through a communication of respondent bank that the respondent bank 7 has already sold out the property in question through public auction in the recovery of their dues. It is not denied that the loan of Rs.5.00 lacs was sanctioned and disbursed to the applicants on 21.11.02 for a period of 10 years. As per version of the applicants, they have so far deposited Rs.2.85 lacs against the outstanding. They have shown their willingness to pay more amount within the time given by the Tribunal. They have prayed that until the final decision of present appeal, the confirmation of sale, issuing sale certificate and taking over of actual possession of residential house be stayed. I have heard learned counsel for the appellant/applicant at length and have gone through the record. From the Annexure-3, it is revealed that on 2.8.06 the applicants have deposited Rs.1.50 lacs with the respondent bank and at that time only the bank has informed that the property in question has been sold out on 1.8.06. Considering all the facts and circumstances of the case, it would be proper to issue notice to the respondent bank. However, till the next date, bank is directed not to dis-possess the appellants, if already not dis- possessed, from the premises in question. Put up on 4.10.2006 for filing reply and disposal of interim relief. In addition to other mode(s), 'Dasti' notices also be issued alongwith this order. Applicants shall take necessary steps within two days.” 15. Apparently the Bank not only dispossessed the loanees from the mortgaged land and the partly constructed structure, without even resorting to Section 14 of the SARFAESI Act as there is nothing on record to show that any such permission is taken from the District Magistrate. Though 8 symbolic possession might have been taken under Section 13(4) of the SARFAESI Act, but the physical possession could have taken only been taken by resorting to Section 14 of the SARFAESI Act and there is nothing on record to show that Section 14 was resorted to, whereby the secured creditors could take the possession by resorting to summary procedure provided. It is thus apparent that the Bank in haste as such had auctioned the property and handed over the possession to the present appellants. 16. In such circumstances, we are of the considered opinion that the findings recorded by the Tribunal were well justified in the manner in which the sale had taken place, which was not kept in mind by the Debt Recovery Appellate Tribunal while interfering in the order, and thus the learned Single Judge has rightly set aside the same. 17. Section 13 (4) notice dated 24.03.2006 would also go on to show that the property in question was shown as a plot of 0.4 biswas and there is nothing mentioned as to the quantum of construction raised on it. The auction notices thereafter, which have been also placed on record, and the Public notice for sale, which was issued on 24.06.2006, also talks in similar manner 9 about only 0.4 Biswas, the reserve price fixed at Rs.6.75 Lacs and the auction was fixed for 01.08.2006. The sale certificate issued under Rule 9(6) of Security Interest (Enforcement) Rules, 2002 dated 31.08.2006 would also go on to show the description of the immoveable property only regarding its Khasra Numbers and there is no mention as such of the construction raised on it. 18. In General Manager Sri Siddeshwara Cooperative Bank Limited and another vs. Ikbal and others reported in (2013) 10 SCC 83, the Apex Court had dealt with the Security Interest (Enforcement) Rules, 2002, to come to the conclusion that Rule 9(1) is mandatory, but this provision is for the benefit of the borrowers, whereas Rule 9(3) (4) is for the benefit of secured creditors. 19. Similarly in Mathew Varghese vs. M. Amritha Kumar and others, reported in (2014) 5 SCC 610, it was held that Rule 8 (6) of 2002 Rules, talks about material aspects to be made known, when effecting the publication and that the intending purchaser should have entire details of the property brought for sale. The factum of the secured assets deriving the maximum price and no one is allowed to exploit the vulnerable situation and rights of the owner should be protected, was 10 discussed in detail. Accordingly, it was held that the requirement is that the rights of the owner till such right is transferred in the manner known to law is not infringed, the absolute power of the secured creditor to deal with it by way of sale, however did not mean that such wide power can be exercised arbitrarily or whimsically to the disadvantage of the borrower, and that the assets could not be treated in the light- hearted manner by way of sale or transfer or disposed of in a casual manner or by not adhering to the requirements, keeping in view the fact that there is constitutional right as well as human right for a person to hold on to his property. 20. The similar view has been followed in J. Rajiv Subramaniyan and another vs. Pandiyas and others, reported in (2014) 5 SCC 651, wherein it was held that bona fide measures had to be taken by the secured creditors to ensure maximum yields from the property, which is being put to auction and that the secured assets is not sold for a song. 21. In Vasu P. Shetty vs. Hotel Vandana Palace, reported in (2014) 5 SCC 660, it was noticed that auction purchaser had not paid the balance 75% within 15 days and the plea of waiver as such was rejected and it was held that the sale 11 is to be treated as null and void and the refund was directed to the purchaser. 22. Perusal of the sale deed executed in favour of the appellants would go on to show that there is a mention as such in the same regarding the fact that there is built up area on the land, which was never mentioned in the notice under Section 13(4) and auction notice etc. It has further been mentioned that bid amount was deposited on 01.09.2006 and the Branch Manager, State Bank of Patiala, Sanjauli Branch, had acknowledged the receipt of the bid money. In such circumstances, once there was no mention of built up area in the possession notice under 13(4) and similarly in the public notice for sale of immoveable property, we fail to understand how the interest of the borrower had been kept in mind by the secured creditors, who had put their property to auction. The manner in which the sale certificate had been issued would also go on to show that the Bank did not keep in mind the interest of the borrower at all, which is also the specific case of the borrower that on 11.06.2006 they had served a notice as such upon the Bank, whereby reference is made to Section 13(2) notice and the fact that after the said notice, they had made various payments, which had been received by Bank. In the said 12 notice also there was a reference to built up structure raised, which is stated to be in the possession of the auction purchaser, but no possession had been taken by taking recourse to Section 14 of the SARFAESI Act. It is also mentioned that Geeta Devi, one of the co-owners has been posted outside Shimla for the last three years and the specific averment was made that the Bank has obliged some persons by selling the property at a throw away price. The objections were never dealt with, rather the above findings have gone to show that there is substance in the same. 23. The Auction proceedings would go on to show that the first bid was only for Rs.7,00,000/- inter se four bidders and the properly was sold to the present appellants for a sum of Rs.8,80,000/. 24. Apparently confirmation of sale was done on 02.09.2006, on account of the fact that deed of sale was registered with the Sub Registrar, the necessary endorsement was made. Thus, apparently inspite of the fact that the matter was pending before the Tribunal and as noticed above, the Bank had been directed not to dispossess the appellants, if not already dispossessed from the premises in question as the reply was yet to be filed. 13 25. The matter had come up before the Tribunal on 04.10.2006, wherein the Tribunal had noticed this aspect and resultantly directions had been issued to implead the auction purchaser on the subsequent date on 01.11.2006. The Tribunal had also noticed that a sum of Rs. 1,50,000/- has been deposited on 02.08.2006, but had been returned back by way of draft and another amount of Rs.3,72,324/- as such had also been deposited with the Tribunal. It is in such circumstances, the findings have been recorded by the Tribunal in favour of the loanee, vide order dated 17.12.2009, on various grounds, including the fact that the account had wrongly been declared NPA. The reference had also been made in the sale deed that the amount in question had only been deposited with the Bank on 01.09.2006 and it is in such circumstances, the Tribunal had come to the conclusion that it was beyond the prescribed period of 15 days as per Rule 9 (8) of Security Interest (Enforcement) Rules, 2002 and therefore had gone to set aside the auction proceedings by coming to the conclusion that there is gross violation of rules, apart from issue of valuation. 26. The factual matrix as such has been recorded and appreciated by the learned Single Judge, therefore does not 14 require any interference by us, on account of the manner in which the sale, as noticed, was finalized within a period of five months from the date of Section 13(4) notice and without even taking recourse to the provisions under Section 14 of the Act and the possession was handed over to the auction purchasers. Thus, the manner, in which the proceedings have been conducted, had been rightly doubted by the learned Single Judge and the property has thus been restored to the borrowers, since they have also cleared their dues. The Bank has never agitated the issue further after having received the amount and never approached the Appellate Tribunal. 27. In similar circumstances in Union Bank of India vs. Rajat Infrastructure Private Limited and Others reported in (2023) 10 SCC 232, the Apex Court examined the provisions of Rule 9(4) of 2002 Rules regarding obligation of the auction purchaser to deposit the amount as per the statute within 15 days of the confirmation of the sale and the limited power of Courts to extend the same, which, in that case, was on account of Covid intervening period. Herein also, it has been noticed that the miscellaneous application had been filed that the sale certificate be issued on account of full and final payment. Resultantly, the 15 said application was dismissed while noting that there was no extension granted and the interest amount had not been deposited within the prescribed period and when the statute requires particular thing to be done in a particular manner, the same had to be done in that manner only and other methods of performance are forbidden. 28. In overall circumstances, we are of the considered opinion that allowing of the Writ petition is in the interest of justice and also restoration of the property to the original land owners. Resultantly, the said order is upheld. However, as far as the amount of Rs.8,80,0000/- deposited by the auction purchaser is concerned, we are of the considered opinion that the Bank cannot as such enjoy the fruits of the deposits from both sides and therefore we direct the Bank to refund the said amount alongwith interest @8.5% from the date of deposit within a period of six weeks from today. The Bank shall also thereafter handover possession of the property to the private respondents herein and the appellants will not raise any resistance. In case the possession is not handed over, the District Magistrate shall ensure handing over the possession to the respondents within two weeks. 16 29. Accordingly, the Appeal stands disposed off alongwith all pending applications. ( G.S. Sandhawalia ) Chief Justice 26th August, 2025 ( Ranjan Sharma ) (priti) Judge